Open skies is a model of success, says Etihad Airways president and chief executive officer

Open Skies has been “a model of success, generating enormous benefits for travellers and for airlines in the US, the UAE and around the world,” said James Hogan, President and Chief Executive Officer of Etihad Airways, speaking today at the US Chamber of Commerce Foundation’s 14th Annual Aviation Summit in Washington, DC.

In his first
public comments since three US airlines launched a campaign against Etihad
Airways and other Gulf carriers, Mr Hogan called for reasoned debate based upon
facts. He also warned against action
which would restrict competitive choice for millions of US and international
air travellers in markets which the US airlines have chosen not to serve.

“As one of the
newest national airlines anywhere in the world, we’ve had to create everything
from scratch: every bit of product, every bit of our operations, every bit of
our infrastructure,” he said.

“Etihad is a
David, a David who’s been facing Goliaths since 2003, when we started. In virtually every market we’ve entered,
we’ve had to face existing competitors, with established businesses,
established infrastructure, established sales and marketing, established
brands, and established customer bases.

“To take them
on, we’ve had to work harder and we’ve had to work smarter. That’s called competition.

“We’ve been
helped by our geographic position. The
Gulf is at the centre of today’s trade and travel routes. Today’s aircraft technology and the changing
patterns of world trade mean we are positioned strongly for many new and
emerging markets.

“We’ve been
helped by our blank sheet of paper – no legacy systems, no legacy aircraft, no
legacy mindsets.

“And we’ve
been pushed hard by the vision and ambition of our shareholder to create a
globally competitive airline.”

Mr Hogan said
the ‘secret’ behind Etihad Airways’ rapid growth was nothing more than
incredible customer service, delivered on modern new aircraft, with
world-leading product, at competitive prices, on routes people want to fly.

He also said
that Etihad Airways had been more transparent about its business than other
airlines.

“Etihad
Airways has had a greater focus on reaching and delivering sustainable
profitability – we believe – than any other national airline in history,” he
said. “We set a timetable to break even
within a decade and we beat that target.
We’ve delivered a net profit in each of the last three years.

“I say ‘we
believe’ because it is surprisingly hard to find financial information about
the first one or two decades of national airlines around the world. We get criticized regularly for our so-called
lack of transparency but we see few national airlines that were as open in
their first stages of development, as we are being in ours.”

As a national
airline owned by its government, said Mr Hogan, Etihad Airways is no different
than scores of airlines around the world.
The airline has always made clear it has received equity investment and
shareholder loans, which have been supplemented by US$ 10.5 billion in loans
from international financial institutions.

“Our
shareholder believes in our business plan.
They have increased their commitment as we have developed – they have
invested in our success.

“They’ve seen
the success we are delivering, both as a business in our own right and as a
catalyst for other business, trade and tourism, in Abu Dhabi and the UAE. We
are now not just an airline but a successful aviation group, incorporating
handling, maintenance and distribution capabilities.

“Our
shareholder, like any rational shareholder in the world, has made that
commitment to us because it expects a return, and as it sees greater success
from our business, it sees the opportunity for even greater returns in the
future.

“The key word
is return.”

Mr Hogan
continued by outlining the economic contribution that Etihad Airways delivers
to the United States, directly through its daily flights between Abu Dhabi and
six US destinations, which the airline serves exclusively, and also through its
extensive supply chain partners throughout the country.

“We regard
ourselves as a friend of the United States,” he said. “Certainly, the bonds between the UAE and the
USA are incredibly strong, and we believe Etihad Airways has always reflected
that in our business operations.

“We are major
customers of Boeing, of GE, of Sabre, and of many other American
businesses. We work with strategic American
partners – for example, with Atlas, on developing and improving global cargo
operations. We work with US financial institutions, with US tourist boards,
with US airports. Our commitment to the
US economy supports more than 200,000 jobs.”

He used the
example of the airline’s first Boeing 787 Dreamliner flight into the United
States, which started on Sunday from Abu Dhabi to Washington DC. The aircraft
is the second of 71 Dreamliners on order from Boeing, part of total orders of
almost 120 aircraft worth more than US$ 36 billion with the American
manufacturer.

In addition,
he said, Etihad Airways delivered 180,000 travellers onto the networks of US
airlines in 2014, and 50,000 in the first two months of 2015.

Mr Hogan
finished his speech by saying Open Skies is about customer choice.

“This is
ultimately all about consumer choice. Customers choose to fly Etihad Airways
because we offer a great product, with outstanding service, on the routes they
want to fly, at prices that are competitive within those markets.

“They choose
us against many different competitors, depending upon which market we are
in. But quite honestly, it is very rare
that US carriers offer those alternatives.
No US carrier flies into Abu Dhabi.
There are very few US carriers operating to where we do in the Indian
sub-continent, in south-east Asia, or in the wider Middle East.

“We
make no apologies for offering new competitive choice for air travellers. We hope to continue to do so around the
world.”